According to court records and local press reports On Monday April 22, 2013 a complaint was filed in the California Superior Court (Alameda) by Georgia Santos, Deputy District Attorney for Alameda County against William Richard Hogarty, James Allen Rivera Jr, Gregory Wayne Lomba and James Torpey. The complaint alleges that the four engaged in a conspiracy, using false advertising, to defraud home owners facing foreclosure of $69,000 in illegal advance fees.[Click here for the Complaint]

Hogarty is the owner of O.F. Lending (OFL), a company that is now out of business, which purported to offer short pay refinancing to assist homeowners that were “upside down on their mortgages”. The company traded from 7139 Koll Center Parkway #100, Pleasanton, CA 94566. Rivera, Lomba and Torpey were all employees of OFL.

12 counts of Grand Theft of Personal. The 12 counts all deal with amounts of between $1625 and $10,000 and list the names of the persons who paid up front fees for what were effectively loan modifications.

1 count of Conspiracy to Defraud Another of Property

2 counts of Conspiracy to commit a crime

1 count of perjury in relation to a Bankruptcy Filing in the Northern District of California

According to Court Records the Alameda County District Attorney’s Real Estate Fraud Division received its first complaint regarding Hogarty and O.F. Lending on 7/15/2010. The complainant alleged that she had paid an advance fee to O.F. Lending for a Short Pay Refinance (SPR) and then she later learned that documents submitted by OFL were incomplete and as a result she did not obtain her loan modification.

An investigation was launched and determined, amongst other things that:

In order to persuade the “victims” to pay the advanced fee’s Hogarty and his associates allegedly told them that OFL would negotiate with their lender and that any advanced fee would be fully refundable if they failed to secure them an SPR.

An investigation of OFL’s and Hogarty’s bank records showed that the victims had paid a collective total of $369,326.70 in advance feesand that all 66 victims had been unsuccessful in obtained an SPR but only 8 of them got partial refunds totaling $26,875.

The investigators were informed by both Citi and Wells Fargo that they never took part in the SPR programs in 2009 or 2010.

That both Hogarty and Rivera both advertised a high success rate for the program but in reality it was on 3%.

That when CA SB 94, which banned advanced fees, went into effect OFL continued to collect them.

On or about 1/24/2011 Hogarty filed for Chapter 7 Bankruptcy in the Northern District of California and that he testified that he “gave out $421,000” refunds to clients who did not obtain an SPR. Based on this investigation and another by the United States Trustee it was found that he did not distribute $421,000 in refunds.

During a recorded interview Rivera told investigators that he admitted he falsely told clients that Wells Fargo participated in the OFR program and that the 70% SPR success rate touted by OFL was false and actually was 1-2%.

Rivera also said that whenOFL clients did not obtain an SPR they were pushed towards short sales as Hogarty would gain financially from the short sale of properties.

During interview Lomba admitted that he had potential OFL clients pay advance fees and that he new that clients who were being signed up did not qualify for SPR programs.

During interview Torpey admitted that Bank of America, Wells Fargo and Chase Bank never participated in SPR programs.

Further updates will follow as this case progresses throught the courts.